The UK’s trade watchdog has recommended that caps be imposed on foreign imports of steel to protect the UK’s domestic producers, following widely reported concerns around the ‘dumping’ of foreign products.

Yesterday (13 May), the Trade Remedies Authority (TRA) published its preliminary findings, proposing that country-specific caps be imposed on three categories of steel: rebar, metallic coated sheet and plates.

The TRA is the UK’s official body for trade remedies, having been created as part of the Brexit process.

October deadline

Under the proposals, a 40% country cap would apply to the three product categories. If goods from any country exceeded this cap, then they would be subject to higher tariffs.

The caps are due to come into effect on 1 October. Carry over quotas, where unused quotas would be available for the next quarter, are set to be scrapped from 1 July.

Evidence submitted to the TRA suggested that exports from Vietnam, South Korea and Algeria dominated the UK’s imports of sheet, alloy and rebar products, respectively.

The TRA said in its recommendation that “there has been a change in demand for steel, both within the UK and globally. This is creating significant pressures on the UK steel industry”.

World Steel, an international association for producers of the metal, predicted that there would be a global drop in demand for steel as the world economy faltered. There are also complaints of significant excess capacity in the market, as countries amp up production and look to offload products onto foreign markets.

There were concerns around overproduction of the metal by China, with numerous countries complaining about Beijing dumping its products on their domestic markets.

Industry concerns

TRA chair Nick Baird said:

“The TRA has listened to the concerns of the UK’s steel industry and worked at pace to recommend changes to steel import quota allocations to help protect the UK steel industry from the destabilising impact of global overcapacity.”

UK Steel, the industry body, said that the TRA’s suggestions went some way towards addressing concerns of the domestic industry, but this still “fell short” of what was required.

UK Steel director general Gareth Stace said that the TRA’s review did “little to effectively defend the UK steel industry from the vast amounts of surplus steel looking to be offloaded onto our shores”.

“The TRA went as far as it could go within the confines of the unnecessarily restrictive UK regulation. Time and time again we find ourselves hamstrung because UK rules are more restrictive than both the EU’s and what is required by the WTO.

“The UK is increasingly an outlier in adhering to outdated trade rules that are at the expense of the national interest.”

The decision is not final. Interested parties have until 26 May to comment, after which the business and trade secretary, Jonathan Reynolds, will make the final decision.

In April, the government took over British Steel in a bid to protect the UK’s last remaining blast furnaces at the company’s Scunthrope site, with Reynolds saying he would “always do what is necessary to keep Britain secure at home and strong abroad”.